Gujarat Gas Share Price Drops The Most In 10 Months As Analysts Flag LNG Price Risk After Q3 Miss

Shares of Gujarat Gas Ltd. fell the most in 10 months as analysts see a surge in spot LNG prices and dependence on the Morbi industrial cluster as short-term risks for the city gas distributor.

Analysts turned cautious as the supplier of piped gas missed profit estimates in the quarter ended December and saw its margin contract.

Q3 FY22 Highlights (Consolidated, YoY)

  • Revenue up 81% at Rs 5,241.16 crore, against the Bloomberg consensus estimate of Rs 3,830 crore.

  • Net profit down 69% at Rs 122.94 crore compared to the estimated Rs 168 crore.

  • Ebitda down 61% at Rs 237.49 crore.

  • Margin stood at 4.6% against 21.7%.

The volume growth prospects of Gujarat Gas, however, remain robust, analysts said.

Shares of the company dropped as much as 6% as of 10:30 am on Wednesday. The stock has slipped below the 200-day moving average on high trading volume. Its trading volume was 10 times the 30-day average at this time of day.

Of the 31 analysts tracking Gujarat Gas, 19 recommend a ‘buy’ and six each suggest a ‘hold’ and a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 8.2%.

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